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Stachler Harmon Attorneys at Law Nov. 25, 2019

When starting to plan your estate, you will likely be interested in planning strategies that will benefit you from a tax perspective. In addition, you may be reflecting on things you can do to make a positive impact on the world and benefit causes that you care deeply about.

Creating a charitable trust can help you to give back while at the same time benefitting you tax-wise. However, if you are torn between leaving a significant portion of your estate to a loved one and leaving it to a charitable cause, you should reflect more on whether a charitable trust is the right choice for you.

The Tax Benefits Associated with Charitable Trusts

If you have a high amount of assets meaning that your estate will become subject to estate taxes at the end of your life, transferring a portion of your assets to a charitable trust in your lifetime could help to solve this issue. Additionally, funding your charitable trust means that you can take an income tax deduction and spread it over five years. If you choose to fund your charitable trust from profits made from stocks or real estate, for example, you can avoid capital gains tax as a result.

How a Charitable Trust Can Benefit Your Loved Ones

It can be possible to direct the assets in a charitable trust to a non-charitable beneficiary after a certain number of years. For example, you may want to send annual payments from the trust to a charity for 20 years. After this time, you may want to divide the remaining assets held in the trust between your grandchildren. This can make it possible for your favorite charity and your loved ones to benefit financially from the trust.

The Emotional Benefits of A Charitable Trust

Using the assets you have accumulated during your lifetime, it can be possible to create real change in the world. Your funds could be used to save lives and benefit those less fortunate. Charitable giving is a real joy that can bring meaning to your life.

There are several different types of charitable trusts that can be tailored to your financial situation and personal wishes. It's never too early to start planning your estate for the future benefit of others.